I’ve done several previous posts on Reprographics 101 about Stadium Capital continuing to build its position in ARC shares. Today is yet another “update post.”
Since the last time I posted about Stadium Capital’s ownership (and purchases) of ARC shares, Stadium Capital has completed one additional purchase of ARC shares. Here’s the latest table reflecting Stadium Capital’s purchases of ARC shares from August 23, 2011 through December 8, 2011.
As I said in my last update-post, at the rate Stadium Capital is purchasing ARC shares, it might not be too long before Stadium Capital’s position in ARC shares is greater than Micro Device’s position in ARC shares. (Micro Device is owned by Mohan and Suri.)
| Transaction Date | Purchase Price | # of Shares Purchased | # of shares owned, after purchase | %age of O/S Stock Owned |
| 8/23/11 | $3.79 | 30,600 | 4,676,921 | 10.12% |
| 8/24/11 | $3.88 | 17,991 | 4,694,912 | 10.16% |
| 8/25/11 | $3.80 | 244,000 | 4,938,912 | 10.69% |
| 9/2/11 | $3.54 | 29,315 | 4,968,227 | 10.75% |
| 9/6/11 | $3.45 | 1,833 | 4,970,060 | 10.75% |
| 9/8/11 | $3.57 | 6,591 | 4,976,651 | 10.77% |
| 9/9/11 | $3.49 | 11,641 | 4,988,292 | 10.79% |
| 9/12/11 | $3.54 | 17,256 | 5,005,548 | 10.83% |
| 9/20/11 | $3.56 | 13,737 | 5,019,285 | 10.86% |
| 9/21/11 | $3.50 | 9,170 | 5,028,455 | 10.88% |
| 9/26/11 | $3.47 | 5,500 | 5,033,955 | 10.89% |
| 9/28/11 | $3.33 | 27,524 | 5,061,479 | 10.95% |
| 9/29/11 | $3.29 | 22,203 | 5,083,682 | 11.00% |
| 9/30/11 | $3.35 | 41,019 | 5,124,701 | 11.09% |
| 10/3/11 | $3.20 | 18,348 | 5,143,049 | 11.13% |
| 10/17/11 | $3.64 | 15,497 | 5,158,546 | 11.16% |
| 11/1/11 | $3.89 | 2,201 | 5,160,747 | 11.17% |
| 11/9/11 | $4.29 | 14,605 | 5,175,352 | 11.20% |
| 11/15/11 | $4.30 | 804 | 5,176,156 | 11.20% |
| 11/16/11 | $4.34 | 8,304 | 5,184,460 | 11.22% |
| 11/17/11 | $4.28 | 5,225 | 5,189,685 | 11.23% |
| 11/23/11 | $3.99 | 10,669 | 5,200,354 | 11.25% |
| 11/29/11 | $3.94 | 2,517 | 5,202,871 | 11.26% |
| 12/5/11 | $4.29 | 143,472 | 5,346,343 | 11.57% |
| 12/6/11 | $4.14 | 1,718 | 5,348,061 | 11.57% |
| 12/7/11 | $4.25 | 9,169 | 5,357,230 | 11.59% |
| 12/8/11 | $4.18 | 14,804 | 5,372,034 | 11.62% |
Stadium Capital had amassed 4,646,321 ARC shares prior to August 23rd, and I’m pretty sure that those earlier share purchases were completed when ARC’s stock price was substantially higher than it’s been of late.
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What do you think this means? Do you think Stadium Capital may buy out ARC? Maybe merge it with their other major corporate holding (a builder's supply company as I recall)?
ReplyDeleteThe signs seem to be there for a major change / announcement soon: a huge drop in stock price over the last 6 months, continuing investment by Stadium Capital (but Micro Device isn't buying shares), continuing decline in revenue/sales, no additional expansion planned (as far as facilities), consolidation of adm. offices in CA, no bids going out, loss of major contracts (Boeing), drop in Moody's rating, a new CFO who is an expert in mergers, and Suri seems to be quietly sinking into the background. Maybe he is ready to get out of the business before it is unrecognizable...
In researching Stadium Capital Partners, they tend to be heavy handed once they have a major stake. I wouldn't be surprised if they started making some demands on ARC soon ...
ReplyDeletehttp://www.istockanalyst.com/article/viewiStockNews/articleid/3505270
http://seekingalpha.com/article/48104-stadium-capital-expresses-dissatisfaction-with-rural-metro-corporation
In my opinion, Stadium Capital believes that ARC’s stock is very undervalued (relative to ARC’s long-term recovery and growth prospects) and that ARC’s shares will rise, over time, to more, perhaps even significantly more, than the price Stadium Capital has paid for its ARC shares. Stadium Capital has been building its position for quite a while by now; early on, paying a much higher price-per-share than it has recently been paying since ARC’s shares fell in August. My guess is that if Stadium Capital liked ARC at $8.00, it must love ARC at less than $5.00. Why else would Stadium Capital be continuously adding to its position?
ReplyDeleteI certainly do not think that Stadium Capital has any plans to buy all of ARC (or even a controlling interest in ARC.) ARC would not be any sort of fit with Builders’ First Source (that combo would make zero sense to me.)
I don’t see any major changes (or announcements) by ARC over the near-term. From the financial reports and earnings-transcripts I’ve read (and based on a brief discussion I had with Suri at the ERA convention), ARC management believes that it is on the right course to ride out the rest of the A/E/C recession and to pursue the opportunities it has identified to develop a more diversified revenue stream (and a more diversified customer base); ARC’s strategy appears to be focused on large-format color (RIOT Color), MPS (managed-print-services), and on rolling out its software products/services (such as PlanWell Collaborate and iShipDocs, among two). Personally, I don’t see the Boeing deal as more than a minor blip for ARC. As to the downgrade by Moody’s, does anyone, nowadays, put any credence in ratings from Moody’s, S&P or Fitch? They’re the ones that rate as AAA packages of sub-prime mortgages! Screw them. That downgrade won't hurt ARC or ARC’s stock price. I don’t see Suri retiring anytime soon. He is certainly doing the work necessary to groom Dilo as the next CEO, but any wise CEO would be doing that. All in all, I see ARC (and its management team) “staying the course”, doing (together with the entire ARC team) the hard work necessary to get though to the other side of the current A/E/C industry recession.